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House Panel's Plan to Start From Scratch
On Stimulus Bill May Spark Free-for-All

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Shailagh Murray Staff Reporter of The Wall Street Journal

Updated Oct. 11, 2001 12:01 a.m. ET

WASHINGTON -- The House Ways and Means Committee will introduce its economic-stimulus package Friday -- in the form of a blank sheet of paper.

The unusual move allows members to offer their pet stimulus proposals by amendment. It also assures that the bill submitted to the full House will be heavily seasoned with Republican priorities, including a capital-gains tax cut and possibly corporate income-tax breaks. Republicans outnumber Democrats on the panel by nearly 2 to 1.

The approach, offered by Chairman Bill Thomas (R., Calif.), is unprecedented in recent memory. Since Republicans took control of the House in 1995, party leaders have tightly controlled Ways and Means, often dictating the parameters of crucial bills. That has repeatedly frustrated Democrats and even Republicans on the panel who, despite their prized assignment, get little chance to push their own priorities.

By setting up a free-for-all, Mr. Thomas is allowing conservatives to play a more prominent role in the debate. Their priorities have gotten short shrift in recent negotiations between Congress and the White House.

Starting Friday, Mr. Thomas said, "There's nothing on the table or off the table. We're going to let the committee build the product." He is unclear if House rules would allow him to start from scratch -- Democrats insist he at least needs a bill number and a title -- but if they do, he said, "My goal is to bring in a blank piece of paper."

The move means the stimulus legislation, until now a bicameral venture, will move on separate tracks in the House and Senate. It also increases the likelihood that the Democratic-led Senate will take a more partisan tack with its bill, loading it up with unemployment and low-wage worker relief. Meanwhile, the White House likes some conservative priorities but also supports variations of the Democrats' top two objectives.

"The president wants a bipartisan bill. We will continue to work with members of both parties to achieve that," said Mark Weinberger, assistant Treasury secretary for tax policy.

New estimates from the Senate Budget Committee show that the stimulus package President Bush outlined Friday -- and predicted would cost between $60 billion and $75 billion -- could hit $114 billion. GOP House leaders hope to keep their package to below $85 billion, although conservatives are willing to commit as much as $100 billion. Mr. Thomas also wants to restrict the package to measures that will ripple through the economy within six to 12 months.

House Republicans are expected to push priorities that Mr. Bush advocated Friday, including corporate alternative-minimum-tax repeal, accelerating the individual rate cuts scheduled for 2004 and 2006, and allowing companies a bonus deduction on new equipment purchases. But they also are expected to seek reductions in the corporate-income and capital-gains taxes -- measures Mr. Bush has declined to endorse.

GOP members also will seek to make some tax breaks permanent, a move the White House supports as well. In a speech prepared for the National Foreign Trade Council last night in New York, Treasury Secretary Paul O'Neill argued that policy makers must be mindful of the risk of driving up long-term interest rates. But "that does not mean that all policy changes should be limited to one year," he said, suggesting that new depreciation breaks in particular should be permanent.

House Democrats will offer amendments that track with their stimulus priorities. These include $35 billion in tax measures, including a holiday rebate for low-income workers; a temporary expensing and/or depreciation bonus for business; and extending a handful of business tax credits scheduled to expire this year. An additional $30 billion would go to new unemployment benefits, including health coverage. House Democrats also are expected to push for as much as $35 billion in new spending for infrastructure projects.